Thursday, May 19, 2011
May Parol Evidence be considered in interpreting a contract?
CONTRACT CONSTRUCTION AND THE PAROL EVIDENCE RULE When is parol evidence [verbal, oral, affidavit testimony] proper in contract construction? The construction of an unambiguous contract is a question of law for the court to determine. MCI Telecomms. Corp. v. Tex. Util. Elec. Co., 995 S.W.2d 647, 650 (Tex. 1999). An unambiguous contract will be enforced as written, and parol evidence will not be received for the purpose of creating an ambiguity or to give the contract a meaning different from that which its language imports. David J. Sacks, P.C. v. Haden, 266 S.W.3d 447, 450 (Tex. 2008) (citing Universal C.I.T. Credit Corp. v. Daniel, 243 S.W.2d 154, 157 (Tex. 1951)). What is the role of extraneous evidence (outside the four corners of the contract)? Only where a contract is ambiguous may a court consider the parties’ interpretation and admit extraneous evidence to determine the true meaning of the instrument. Haden, 266 S.W.3d at 450 (citing Nat'l Union Fire Ins. Co. v. CBI Indus., Inc., 907 S.W.2d 517, 520 (Tex.1995)). SOURCE: Houston Court of Appeals - 01-09-00856-CV – 5/19/11 RELATED TERMS AND PHRASES: contract interpretation, construction, enforcement - parol [ not parole ] evidence rule - not the best evidence objection - explaining what the contract language means